Tuesday, March 15, 2011

A Brooklyn Bridge, Cute State Senator, Involve Forest City in New York Corruption Case

Wire-taps, bribes, scathing snippets of conversation published in the newspaper; ring a bell? The scenario must be annoyingly familiar to Cleveland’s best-loved real estate developer, Forest City Enterprises. Although the company avoided the Cuyahoga County corruption fallout, it’s not faring so well in New York where it is being showcased as “Real Estate Developer No. 1” in a federal public corruption case there.

The criminal case was unsealed last week and is a little complicated. We will try to boil it down for you. There is a skating rink, a retail development, and a bridge in Brooklyn. To clarify—not the Brooklyn Bridge, but another one. All are part of a new complex that the company's Forest City Ratner division is developing to be the new home to the Nets.

There is a State Senator, Carl Kruger (yes, a Democrat), and Forest City Ratner VP Bruce Bender, who thinks the State Senator is "cute." Kruger is accused of taking $1 million in bribes including money from a guy named Richard Lipsky whose job was to lobby state government on behalf of Forest City Ratner.

Acting separately from lobbyist Lipsky, Bender asked Kruger for $9 million in state money to finance the skating rink park, retail development, and that bridge. He was told that only $4 million in state money could be had.

Mr. Kruger, whose phone had been tapped, called Mr. Bender and told him “that he had to choose what project he wanted to get done.” Mr. Kruger made it clear that the bridge was “out.” Mr. Bender said that was “bad.”

Mr. Kruger again asked what Mr. Bender wanted done, the complaint said, then appeared to answer the question himself. “I guess the park,” he said. He ruled out the shopping center, and as for the bridge, he referred to it with an obscenity.

In another call, Mr. Kruger told Mr. Bender that another $500,000 was available for the skating rink. “The vice president laughed and said, ‘You’re cute. You’re good. You’re good, Carl, you are a good friend,’ ” the complaint said.

Forest City Ratner denies any wrongdoing and says the conversations do not indicate that Bender had any knowledge of suitcases full of cash the company’s lobbyist may have been dropping on Kruger’s front porch.

Sure. That’s plausible.

The Times notes that this is the second time in less than two years that Forest City Ratner has been named in a federal corruption investigation involving New York. The company has escaped indictment both times.